US wheat stocks will fall to their lowest level in 60 years, which will contribute to a sharp rise in prices, according to US Department of Agriculture projections.
Published Tuesday, the World Agricultural Supply and Demand Estimates (WASDE) also reveal lower corn and oilseed stocks by the end of the 2007/08, with prices for these commodities expected to rise too.
Projected US wheat ending stocks for the year stand at 280m bushels, adjusted 32m bushels down this month due to higher expected demand both domestically and globally.
Domestic food use is projected 5m bushels higher this month, while exports are projected 25m bushels higher.
Global wheat production for 2007/08 is lowered one million tons this month, with lower output from Canada, Europe and Argentina.
According to USDA, the projected season-average farm price is raised 30 cents on each end of the range to $6.20 to $6.60 per bushel, reflecting sharply higher cash and futures prices.
The projected range is well above the record of $4.55 per bushel in 1995/96, said the agency.
US corn ending stocks are projected 100m bushels lower this month, while exports are set to increase 100m bushels to 2.45m on the back of increased demand.
Corn farm prices are expected to reach record highs of $3.35 to $3.95 per bushel, up 15 cents at both ends of the range. These prices surpass the previous record highs of 1995/96.
Corn production for 2007/09 is projected 1.1m tons higher this month, with increases expected in Canada, the European Union and the Former Soviet Union.
Sorghum, barley, oats
Sorghum season-average prices are projected 20 cents higher on each end of the range to $3.20 to $3.80 per bushel.
Barley prices will also surpass the previous 1995/96 records to reach $3.70 to $4.30 per bushel, a 15 cent increase on each end.
Global barley and oats production for 2007/08 are both lowered, more than offsetting the increase in corn production.
US oilseed ending stocks for 2007/08 are projected at 6.1m tons, down 0.7m from last month.
Soybean ending stocks are down 25m bushels to 185m, a 68 percent decline from 2006/07, while exports are raised 20m bushels based on stronger-than-expected sales to China.
Soybean and product prices are raised this month based on rapidly escalating values within each market, said USDA.
The US season-average soybean price for 2007/08 is projected at $9.25 to $10.25 per bushel, up 75 cents on both ends of the range, reflecting sharply higher cash and soybean futures prices.
Soybean meal prices are projected at $265 to $295 per short ton, up $30 on both ends of the range. Soybean oil prices are projected at 41 to 45 cents per pound, up 3.5 cents on both ends of the range.
Global oilseed production for 2007/08 is projected at a record 391.3m tons, up 0.9m tons from last month. Foreign crops account for nearly all of the change, said the report.
US sugar supply projections were increased 170,000 short tons from last month, due to higher production and imports.
Production is up 112,000 tons, while US usage remains unchanged.
Supply and usage remains unchanged, with production and consumption both lowered from a month ago.
Prices are projected at $10.90 to $11.40 per cwt, up 15 cents per cwt.
Forecasts for 2007 and 2008 milk production are raised slightly, with prices also set to change.
The 2007 all milk price is forecast 10 cents higher than last month at $19.05 to $19.15. In 2008, the all milk price is forecast at $18.00 to $18.80 per cwt.
To access USDA's December 11 WASDE report, click here .